ADP Reports 253,000 Rise in Private Payrolls in May

Hiring at private U.S. employers increased last month at the fastest pace since 2014, another sign the nation's labor market remains strong.

Firms across the country added 253,000 workers to their ranks in May, according to payroll processor Automatic Data Processing Inc. and forecasting firm Moody's Analytics. Economists surveyed by The Wall Street Journal expected an increase of 180,000.

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The April total was revised to 174,000 from 177,000. The ADP report is based on private payroll data in addition to government data.

"The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force," said Mark Zandi, chief economist of Moody's Analytics. "Increasingly, businesses' number one challenge will be a shortage of labor."

ADP's report comes ahead of Friday's employment situation report. Economists expect the Bureau of Labor Statistics to report an increase of 184,000 in May payrolls, down from a 211,000 gain in April. Unemployment is expected to hold steady at 4.4%.